Sharechat Logo

Countdown supermarkets 1H earnings dip as digital investment continues

Wednesday 20th February 2019

Text too small?

Woolworths' New Zealand Countdown supermarkets posted a 2 percent decline in first-half earnings as the national chain continued investing to improve its digital capabilities. 

Earnings before interest and tax fell to $148 million in the 27 weeks ended Dec. 30, from $151 million a year earlier. While sales were up 1.9 percent at $3.4 billion, the firm's cost of doing business ratio increased to 19.9 percent of revenue, from 19.5 percent a year earlier. 

That implies operating costs rose to $676.8 million in the half, compared to $650.7 million a year earlier. Woolworths said the increase was "driven primarily by strategic investment into digital and data capabilities."

Countdown's online sales grew 40 percent in the second quarter, underpinned by more use of its pick-up service, where customers order online then collect their groceries from the store. 

Woolworths wants to see a return from that digital investment, with group chief executive Brad Banducci saying his focus for the New Zealand arm is to realise the financial benefits of the investments in a new brand platform, its digital customer interface, and improved fresh food and health offerings. 

There were 180 Countdown supermarkets across New Zealand with 402,787 square-metres of trading area at balance date, down from 181 six months earlier with 405,274 sqm. 

Woolworths' group profit was A$979 million in the half, up from A$969 million a year earlier. Revenue increased 2.2 percent to A$30.7 billion. The board declared an interim dividend of 45 Australian cents per share, to be paid on April 5. 

The ASX-listed shares fell 4.8 percent to A$28.80. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar eases as US-China trade war, Brexit saga drag on
OceanaGold less confident in regulatory regime
INFINZ says RBNZ bank capital proposals lack analysis and scrutiny
Spark scolded for misleading customers on broadband price hike
Zespri annual profit jumps 77% on higher kiwifruit sales, increased licensing
Freightways says express package growth slowed in 2H, may flow into FY2020
BUDGET 2019: NZ debt target to be more flexible from 2022
Argosy annual profit climbs 36% on revaluation gains, pays slightly bigger dividend
NZ-owned banks says RBNZ capital proposals will make it harder to compete
Sanford earnings hit by vessel impact from crew death

IRG See IRG research reports